Can I Get a Car Lease With Bad Credit?

Your heart is set on a shiny, new set of wheels but your credit is tanked. Don’t despair; you’re not the first driver to face this dilemma. Car leases do exist for those with bad credit and may even help you beef up your score.

Here’s why: Monthly payments can be much lower for leased cars, they often fall under the manufacturer’s warranty and tend to require less money down upfront. Not missing a payment on your lease may also help you amp up your credit, making you that more attractive to lenders down the road.

If all that sounds good to you, here’s how to get started.

1. Check Your Credit

Before you apply for any auto lease, you need to know where your credit stands. That way you’ll have an idea of what type of lease you may qualify for. It may also prevent you from overpaying, lest you think your credit is worse than it actually is. (You can view two of your credit scores for free, updated every 14 days, on Credit.com to see where you stand.)

2. Shop Around

Now that you’ve got your number, it’s time to go shopping. But first, some dating advice: Don’t fling yourself at every slick dealer who feeds you a line — take your time to find the right one. Don’t be afraid to ask questions if something sounds off. Your credit may stink, but you shouldn’t settle for an unfair agreement.

Something to keep in mind: every time a lender pulls your credit report, that’ll create a hard inquiry on your file, which could ding your credit score. But the vast majority of credit scoring models are smart enough to know you’re shopping around and will group your hard inquiries from different dealers into just one inquiry if you complete your shopping in a specific timeframe, ideally two weeks.

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3. Be Realistic

If your score is less than 720, you may encounter some difficulties. This could mean a higher monthly payment, a hard time getting approved or being asked for a security deposit or percentage of the car’s cost upfront. (Some dealerships require the latter, but you can always volunteer to put more money down if you want a smaller monthly payment.)

It’s also helpful to go into the process with realistic expectations. You don’t have a perfect credit score, so you don’t want to overextend yourself and get a super expensive car lease you’re unable to actually pay. Make sure you opt for something that you really can afford like a compact or mid-sized car instead of a luxury sedan, for example. The monthly payments will likely be lower, and there’s no reason to push your budget to the limit if you’re already dealing with financial issues.

4. Explore Other Options

Still coming up short? There are options. You can ask a trusted friend or family member to co-sign your lease. If you choose to go this route, you should both be aware that if you fall behind on payments and the account becomes delinquent, that will appear on your co-signer’s credit report. Only do this if you feel you can manage the lease responsibly.

Another option would be a lease takeover, which is still subject to approval from the original lender. This allows you to take over a lease contract from someone who can no longer make the required payments, and is often easier to qualify for.

[Offer: If you’re worried about errors on your credit reports affecting your ability to get a car lease and you don’t want to go it alone, you can hire companies – like our partner Lexington Law – to manage the credit repair process for you. Learn more about them here.